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iPhone Faces Uncertain Market
48 hours have passed since Steve Jobs's MacWorld keynote and the reality distortion field is beginning to wear off. Lists of the drawbacks of the announced iPhone are sprouting all over the Net (and there is the occasional defense by true believers). Now narramissic writes, "The iPhone may be poised to take over the high-end cell phone market, but is it a market worth taking? Not if an InStat survey from July is any indication: Of 1,800 consumers surveyed, just 21 had spent more than $400 for a cell phone. Prices for the iPhone, admittedly more of a handheld computer than a cell phone, start at $499 for the 4G-byte version with a required two-year contract with Cingular. So, is Apple pricing it right? Analysts quoted in this article seem to think Apple's going to have a hard time getting the 1% of market share that Jobs called for."
That most people won't spend over $400 on a phone because there aren't any phones worth spending that much on? The high end market may be small... but there's no reasoning given for not spending so much... maybe it's just because nothing (until now, IMO) has been worth the extra $$?
If you are looking for an iPod and a phone, or if the phone is a bonus, the price may be worth it to you.
I'm not familiar with the specs of the iPhone, but it isn't as simple as "this is a really expensive phone."
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Just remember what everybody was saying about the iPod when it first came out. You may not like them, but I'd say Apple has been pretty on the mark over the last 5 years or so...
Taking guns away from the 99% gives the 1% 100% of the power.
This report fails to take into account the added capabilities of this phone. People will be much more willing to spend 300+ dollars on a phone from a company that has a impressive history in the mp3 player department. This is not just a phone. Remember that. Prof
If you look at Cingular's current plans for blackberrys, their voice and data packages start at about $80 per month. You can bet they will charge at least that for the iPhone service, if not more. even if it is just $80 a month, you are going to wind up paying $2520 over two years (including $600 for the phone), and that's before fees and taxes.
So that $600 price tag is really closer to $3000.
If Apple is really smart, they've already locked Cingular to a reasonable cell plan. They might be able to capture the high-end market with the iPhone, but without cheaper plans, they will never get the majority of people.
I'm having deja vu reading this article and comparing it to very similar articles on Slashdot (for iPod) few years back.
...and the iPhone is exactly what I want. But I'm not buying it. It's cool, but it's not $500 cool.
I'll probably buy a cheap-o model and wait. Someone let me know when there's an unlocked model for $250.
What if I do the same thing, and I do get different results?
Personally, I think the iPhone sounds cool but I will never buy one (or at least in the near future) ... There are two reasons why I dislike "do everything" or "convergence" hardware, usually the hardware is average or bad at every task and very expensive, forgetting (or losing) a phone/MP3 Player/PDA is bad but forgetting (or losing) your phone and MP3 Player and PDA is awful.
Something as small as having a touch screen to dial your phone, and display everything, means that you're either going to have to carry around a stylus (which you will probably lose) which will scratch your screen, or your screen will have fingerprints; either way it means images/videos/text will be hard to read.
Quite honestly, we don't know enough about the device yet to make any informed commentary. We're going to have to deal with six months of analysts talking out of their ass about it, and Apple fanboys/haters blathering on about how wonderful/awful it is without more than a basic overview of its functionality and no hands on UI experience. The 'specs' from Apple are a joke, and don't reveal the most basic of needed information. The details of the restrictions that will be placed on the device by Cingular are completely unknown. Until those things are known, it could go in any direction.
Anybody who talks about what is going to happen with the iPhone in certain terms at this point is an idiot.
> Of 1,800 consumers surveyed, just 21 had spent more than $400 for a cell phone.
This could simply mean that there were no phones good enough to justify the higher price tag. I mean, is there a phone with a few GB of memory, big touch screen and really good software? What kind of phone can you buy for $500 right now?
Apple tend to launch a product and then fork it into a product family that covers a nice price range. This format could expand to include a hard drive and become a real portable hand-held, the new Newton. It could also shrink to become a simpler phone. Expect the actual release model in June to have much more memory, and better battery life.
The biggest problem with all smartphones today is that UI design is generally terrible. If Apple can get this right, and make a family of phones that react quickly and are fun to use, they will sell a lot of them.
Further, it seems to me, phone or not, that this is what the iPod will look like in 2 years time. The wheel is no longer needed, and this format makes video a pleasant reality.
So it's quite possible that the "phone" part of this product is less significant than the large-screen, no-button, Apple-inside format.
My blog
Think about it. Most people who buy phones just want a phone that works. That's not the market Apple's going for. They're going for the guys that keep upgrading their expensive iPods with more expensive and newer iPods. Now, they'll get the latest "iPod" but it'll have a phone built-in too. If you look at the sales of the most expensive iPods, you'll see that there's more than enough people there to get Jobs' 1% market share that he wants out of the gates. Don't underestimate the loyalty that the Apple brand garners. It's much like Nintendo's. They'll buy whatever is the latest and greatest.
AirSpeak - http://itunes.com/apps/AirSpeak
1. Apple releases iPhone 1.0 (ApplePhone after Cisco gets through with them?) in 4GB and 8GB sizes
2. Apple Fanboys will buy this version because "17 50 7074||y ru|35 4nd w1|| pwn 7h3 m4rk37 dud3!"
3. Apple will release version 2.0 with way more storage (1.8" hard disk or SSD) for half the price. This will happen in about 18 months, But not actually ship for another 4 - 6 months after it is announced. (so as not to piss off Cingular)
4. Joe Sixpack will buy that version in droves. Fanboys who have version 1.0 rush to upgrade because "17 50 7074||y ru|35 4nd w1|| pwn 7h3 m4rk37 dud3!"
5. Profit!
This is my opinion. To make sure you don't steal it, it's covered by the DMCA.
Businesses do.
Except for gadget geeks, probably 80% of the Blackberrys, Treos, etc are purchased by companies for employees or by business owners.
Apple is hoping to extend that market by taking a typical consumer/parent who is about to buy a $300 iPod anyway and convincing them spend another $200 for a phone that has unique internet capability. The reasoning behind this is that a person who is ready to by a $300 device is far more likely to spring for a $500 device.
The typical phone buyer considers the phone to be almost disposable. If you come into a store to buy a $50 RAZR after rebate, you're not going to get them to spring for $499. So Apple is taking advantage of the iPod buzz to upsell iPod consumers (the average iPod buyer has already owned 3) into iPhones.
This is sales 101. That's why half the people who show up to buy a Toyota Corolla drive away with a Prius. ("Hmm... $5000 more and I have a hybrid AND get bluetooth and that neato screen")
On the flip side, they'll get businesses to buy some too. Enterprises will stick with Blackberries because they use Exchange and like the security aspects of the device, but there are plenty of mid-level managers with purchase authority to spend $500-600.
Conformity is the jailer of freedom and enemy of growth. -JFK
If anyone knows how to achieve a 1% market share, it's Apple.
Well, that's more than 1%...
The iPod line needed a reboot, and the iPhone was splashiest way to do it. In fact, this device is the logical evolution of the Newton MessagePad. Think about it. Apple realized that boring contact lists, calendars and handwriting recognition won't encourage the Unwashed Masses to adopt portable computers. People are far more media-centric than that.
The rejuvenated iPod lineup will tempt you with music, movies and games, while offering an addictive combination of go-anywhere Wi-Fi browsing and email. And you can bet that Apple is planning to open up third-party development as quickly as possible.
As for the iPhone device, the bleak reality is that it is slightly larger than a 5G iPod. Too big to slip into the pocket of my jeans, which means it's too large to use as my everyday phone. My hard drive-equipped iPod usually lives in a messenger bag on my shoulder or in a jacket pocket, simply because it's too bulky to function as an "everywhere" communications accessory. I wouldn't be willing to carry something as large or expensive as the iPhone with me everywhere I go. I'd look like a dork with my calculator on a belt clip. Besides, mobile phones are expensive enough to begin with and many people (especially students) will balk at the idea of committing to a 2 year $1000+ mobile voice/data/voicemail contract after shelling out $599 for the iPhone itself.
No, the real magic will happen when Apple releases a $299 version of this device - the next generation iPod - that retains everything but the GSM + EDGE phone technology. At that point, the iPod will be perfectly positioned to become everyone's favorite teeny-tiny ultraportable computer.
Exactly. The key complaint about the iPod was that it was too expensive. That no one would buy one when they could have a Creative r579X250 or whatever instead. i'm amazed that these complaints KEEP showing up. Apple is in the business of selling people hardware/software combos at a premium. it is WHAT THEY DO. The powerbook and ibook lines were both much more expensive than the direct competition, but they sold poorly when the software/hardware mix was diluted or uncompelling (early/mid nineties) and exceptionally well when the mix was more distinct
The iPhone will be the same way. This isn't apple fanboyism, this is grudging respect. look at the iPod. look at the cheif complaints about mobile phones in general. Not the slashdot complaints, but the complaints among the predominance of users.
1. Poor UI
2. Poor or shoddy design.
3. inability to use features on the phone, or limitations on the interoperability of those features.
Apple fixes these problems for a living. They fix them and then establish the solution at a high pricepoint, and people pay for it. No. it's not going to be unlocked, it's not going to run linux, it's probably only going to support limited software development, if any at all. But people will buy it, at least 10 million people, if not more.
If you've been considering upgrading to the new Treo 750, you're going to spend $500 with a two year contract. And it only comes with 64 MB of ram and a best case expansion of 2 gig which puts the price at $550 and is obviously inferior on paper.
I'm just saying Apple isn't breaking ground on cell phone price points in this category.
Platform advocacy is like choosing a favorite severely developmentally disabled child.
I think Apple isn't all that interested in 'taking over' the high-end cellphone market as much as they're interested in defining a new category of communications device that's not thought of as a cellphone.
This thing is just a first stab, and it's being aimed at the high-end cellphone market, if only because that's a market that exists, and to communicate, you've got to have people to communicate with. But perhaps Apple's betting that, though it may make phone calls, the gadget of the future won't be though of as a phone.
Posted from my Android phone. Oh, I can change this? There, that's better...
If the email client is based on Mail.app it will work w/ Exchange.
You mean the FUD campaign initiated by frightened competitors is flaring up. This story makes it seem like everyone is suddenly deciding not to buy the iPhone after "coming to their senses." Hardly the case. This thing will sell like crazy, and the fact Slashdot is posting a story saying it won't just means it will. Remember the iPod? The iPod mini? Slashdot said they'd fail.
"Sufferin' succotash."
In order to meet their 1% goal they need to sell 10M phones in 2008 (the first full year they are available). That is directly paraphrased from Steve Jobs during the keynote. It may be hard to sell a $500 to $600 phone in those quantities. But Steve Jobs himself said they are going to continue developing iPhones (3G...). Does anyone really think that this is the only phone Apple will be selling for all of 2008?
I think Apple will sell a lot more than 10 million iPhones in 2008 when they add the iPhone nano to their lineup a year from now. I predict the iPhone nano will be physically smalelr and drop some of the pricey "smart phone" features of it's big brother. But it will still have the great interface and importantly, style, of it's big brother. Probably will come in colors too. $200-$300. That will fly off the shelves.
You heard it here first.
Spyky
And before the iPod the most a person had paid for a portable music player for many years was around $50, and usually way less. Which probably explains why the iPod was such a monumental failure. The point is that using devices that have little in common with the iPhone for the purposes of setting the price is pretty useless.
It's brainless to think that Apple will not come out with a simpler, cheaper model in six months. Everybody knows they've been working on two different phones. The surprise with this annoucement was that they brought out the smartphone first.
This makes sense (IMHO). You launch your product in a small, dedicated, technical market first and then bring out your average joe consumer market product when you've got the wrinkles ironed out.
As for that dedicated market, people like me have been waiting for a phone like this for a long LONG time. I've spent well over $1300 on smart phones in the last 9 months and have been disappointed with them all. I couldn't give a damn what it costs - I just want it to work really well.
I am not interested in articles about life extension advancements.
You know of a phone with a full-sized web browser? Pinch interface for resizing? Random access voicemail? The same ultra-thin form factor? A dock connector?
God, just thinking about the dock connector means I can plug this thing into my car for music, and continue to take phone calls during lunch, AND check my email and surf the web. All in the Subway parking lot.
"Sufferin' succotash."
I think it's completely misleading and off-the-mark to compare the iPhone to a cell phone, at all. The only reason we're tempted to do so is because it has "Phone" in the name. But that's almost as absurd as looking at a $2000 "Apple" computer and calling it expensive because you can get an "apple" at the grocery store for 50 cents.
They had to name the product something. But the fact is, you could remove all the phone-related features from this product and it would still be worth $499. It's a PDA and a music and video player and a web browser and a digital camera. It's practically a desktop computer for all the things casual users need. And it's 10 times easier to use than most products in any category you want to put it in. I mean, you point with your damn finger. This is a fucking amazing device. It was amazing yesterday, and it will still be tomorrow.
First I'll admit, I pretty much am a zealot. But many people's dismissal of the product before they see or use it in person is very typical of the telephone game we call the Internet. I saw over here somebody saying this so I'll take it as fact. The truth is we still don't know very much about the product. So let's stop assuming things and think they're set in stone.
My number 1 gripe with people's assumptions is that the iPhone will be a 100% closed-product. This is bunk. Firstly, nobody official has said anything close to that. Just that development kits are not available at this time. Why is that? Let's think about it.
MacWorld is very much Apple's own personal CES. Takes place at the same time for more or less the same purpose: to introduce new products. This show is not so much about the developer because Apple already puts on a giant show just for them, WWDC.
As is widely known, Apple went to great lengths to keep the product a secret. So duh, no development kits were given to even the most tightly NDA'd partners. This thing was even kept secret to most of Apple's OWN employees. So it stands to reason they didn't want to mass-produce developments kits to have available at announcement. Beyond that, third-party software will undoubted bring up alot of flaws in the iPhone-specific parts of the OS and API. I'm sure they don't want somebody else's software mucking with the device at launch that could make it unstable or worse. That isn't to say they don't want third-party software running on it -ever-. Just not at first.
And I'm perfectly okay with that. This is a first-generation device. An Apple first generation device! These tend to be flakey. It does take time to work out the kinks and I'm okay with that too. I'm fairly sure that a dev kit will be available at or shortly after WWDC (hey, that's in June too... hmmmm). They just want time for people to use the device as they intended it.
Concerns about battery life are irrelevant at this point. We don't know how long it will really last. Could be better or worse than everybody is touting. But you know what I couldn't care less either way because I don't spend more than 5 hours per day mucking with or talking on my cell phone. I'm lucky if I can get an hour on even the most smartest of smartphones (and believe me, I've gone through alot of them). I'm willing to be most people won't either.
As for price, puh-lease. Go buy a Cingular 8525 (the super-duper 3G pda-phone that runs Windows Mobile). Aside from WM5 being the most sluggish piece of software on the planet, you'll find that it costs $585 (granted without 2yr contract). That's the same ball park. Same with the Blackjack which is $350 (again, without 2yr contract) but both phones come with negligable internal storage so add on another $100 for 2GB Micro-SD and you're still not close on storage. Some people like removable storage because you can swap cards. I have -never- owned more than 1 memory card for a format, so again, I couldn't care less. Especially considering 8GB is fairly substantial.
So I think most people's fears are overblown. The concern that could be given weight is the QWERTY touch keyboard. But that is a philosophical thing that has to be one way or another. Either you have dedicated tiny buttons or you go virtual and have a large screen. My side on this one is the large screen & virtual keyboard. That's just my preference. I have no need for tiny, fingernail splitting buttons so small that I accidentally press the wrong ones so I much prefer a keyboard on a large pretty screen that I accidentally press buttons on. Even if I wasn't such an Apple whore, I'd side with Steve on this one. Dedicated, ugly micro-keyboards suck (I'm looking at you, Blackjack). The 8525 was, for the most part, comfortable and quick to type on though.
Anyway, I'm sure the next few months will be filled with iPhone bashing as people speculate till their heart's content. I know I'll get one (I've gone through 4 different phones in the past month looking for one that doesn't suck) but the iPhone could very well disappoint me in use, but I won't know that until it comes out in June.
I just wasted your mod points! HA!
Let's see:
Apple iPod Demand Iffy
Pundits compliment, criticize iPod
Favorite excerpts from that second one:
My amazing wife - Artist, Author, Philosopher - Laurie M